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The Digital Path to Business-Economic Growth?!

How to establish a culture for value creation and long-term growth

By Dr. Nicole Pfeffermann, November 30, 2017

In the digital economy innovation activities have shifted from new product development to business model innovation and strategic thinking in open innovation. While firms experiment with involving consumers and a crowd in value creation, only a few, however, turn crowd-powered innovation into thriving digital platforms with a powerful business model.

Communication is thereby of expanding interest and a critical factor underpinning successful innovation, for instance, launching new products, interacting with prosumers and sharing ideas in innovation communities. But how does communication affect growth?

This article goes one step further and focuses on the shift from change to innovation communication in strategic management including a portfolio of communication techniques to facilitate business innovation. It describes the dynamic capability of innovation communication and the linkage to culture for enhancing value creation and long-term growth.

I. The Starting Point: Essentials of Digital Business

Nowadays the consumers have a share in creating value by innovations. Companies compete in new market segments, where access to skills, resources, and knowledge is essential in order to be successful in how to (co-)create, market and deliver value. Value is co-defined and co-created with ‘prosumers’ and business partners and, hence, business model innovation is an on-going process and open innovation is key to succeed in digital business.

It requires to learn how to get access to resources, effectively co-ordinate activities, govern capabilities, manage (digitalized) information inside-outside of a firm’s boundaries as well as constantly evolve IT-driven operating systems. Consequently, organization design builds a strong foundation for both business model innovation and open innovation. It allows an organization to raise the level of evolutionary fitness (innovation) and develop the innovation capability as a catalyst for growth, prosperity and renewal. Those three interrelated concepts have been introduced to business practice in recent years, as shown in Fig. 1.

Innovation Meets Communication: Communication as an Enabler

In the open sharing economy with ubiquitous information on various channels, communication plays a pivotal role in co-creation and crowd-powered innovation, for instance, in customer advisory boards where interactions with customers help to engage and listen to customer problems and their new ideas for product and service solutions (customer-centric innovation).

As shown in Fig. 1, communication is an enabler of business model innovation, organization design, and open innovation. Communication facilitates the successful launches of new products and services, the establishment of stakeholder relationships, and the strengthening of reputation in the long-run. Today firms need to develop, therefore, a strong communication portfolio as an integral part of their innovation management activities.

II. The Shift from Change to Innovation Communication

In this context, it is crucial to better understand how change communication differs from innovation communication and to learn more about specific communication techniques related to business model innovation, organization design and open innovation. The main differences between change communication and innovation communication are shown in the presentation slides below (appendix), Fig. 2.

Change Communication
(The Builder)... is all about managing tasks and people in different projects. Based on a communication plan, project (change) managers deal with disfit-fit thinking and motivational programs including incentives to deliver project results, write up (strategic) communication plans, disseminate and adopt to the New and, finally, move back into the comfort zone (learning model).

Innovation Communication
(The Gardener)... focuses on co-creation with individuals and building an innovation culture which allows individuals to grow ideas, adopt a growth mindset and carry on idea dialogs. Based on the visual communication model design, innovation communicators have the capability to lead and use specific instruments to (co-)create value and move forward in their individual growth zone (learning model).

Three main innovation communication techniques are as follows, as shown in Fig. 3:

1. Communication model innovation: Communication model design

2. Communication design: Reflective innovation dialog

3. Open communication: Smart idea pitch

1. Communication Model Design
The Communication Model Design describes the rationale of how individuals or organizations create value through communication (instruments & channels), reach different (new) markets, and link a strategy to a communication approach to achieve goals. It is a visual, one-page lean startup and strategic management tool for developing, challenging and presenting new or documenting existing communication models.

From the top to the down it helps an individual or team to visualize, plan and discuss the elements needed to translate a business model and strategy into successful action, promote a (new) business, build relationships, and expand market reach based on available or required resources, such as talents, business partners, and IT systems.

Main benefits:

This lean startup tool helps you to describe easily your real business model: How to build customer relationships, promote value and develop partnerships.

This visual tool helps you to better understand and discuss with others how to market & sell ideas and services, and connect with market participants.

This strategic management tool helps you to better develop a communication plan for clear and effective communication.

2. Reflective Innovation Dialog
Another important tool for communication design is the Reflective Innovation Dialog based on critical thinking and, more precisely, the full-spectrum questioning technique. Thinking in a critical way leads to productive thinking which helps to "take on wider, more powerful and useful views of ideas" (Collison et al., 2000: 127). The technique of full-spectrum questioning thereby "can serve as a sort of scaffold [...] to frame questions in a reflective dialogue" (ibid. p. 142). A critical thinker raises vital questions and problems […] thinks open-mindedly within alternative systems of thought, […] communicates effectively with others in figuring out solutions to complex problems. (Richard Paul and Linda Elder, 2008)

The Reflective Innovation Dialog is a visual tool with five questioning sections to systematically grow ideas, envision future directions and create space for opposing thoughts and new viewpoints. It is a very helpful tool to carry on dialogs with individuals, ask the right questions and better select ideas and, hence, facilitate the building of a communication climate which ultimately affect culture. Furthermore, scenario cards support strategic thinking about possible scenarios in case of certain future events and how to become more flexible in problem solving and framing questions in dialogs with individuals.

3. Smart Idea Pitch
This tool is a gamechanger for entrepreneurs and presenters to sell an idea and support audience interaction and proactive branding. Smart Idea Pitch is a visual, one-page lean startup tool which allows users to contemplate new ideas and better prepare for a pitch. It combines different communication techniques, for instance, storytelling, visual communication, logical communication and use cases, and represent a powerful process to structure the thinking and master the communicating mind (read more in this article).

What makes this tool different? Recently published studies and observations have shown that entrepreneurs are much more likely to be successful when they understand and respond to the difference between promotion and prevention-focused people and their questions, for instance, in investor and business angel pitches. Promotion-focused individuals are creative, innovative, risk-taking, “thinking outside the box” people who are much more comfortable with taking chances and open to possibilities. Contrary, prevention people—i.e. efficiency-oriented, low-risk takers—like ideas that are foolproof and most of the time their critical mindset hinders the creation process. The Smart Idea Pitch explicitly understands the difference and helps entrepreneurs to be well-prepared for both types and questions which leads to good results.

III. Why the Innovation Communication Capability Matters

What is the innovation communication capability?

From a strategic management view, innovation communication is defined as a dynamic capability with eight ability dimensions which encompasses managing information transmission between organizations and individuals related to innovation:

(1) ideas, business models, concepts, prototypes, practices, etc., or a combination of them, referred to as a cluster, that are perceived as new by a recipient;

(2) context-issue(s) of ideas, business models, concepts, prototypes, etc. or cluster; and

Linking the innovation communication capability to the concepts (Fig. 5), the innovation communication capability is a specific communication design which impacts the organization design (structure, processes, culture, management and employee relations). The innovation communication capability is, thus, at the core and helps a firm to seize and transform, create and co-create, and consistently align and realign resources and ordinary capabilities with the firm’s strategy. It determines the success of the business (model) and open innovation. Hence, the innovation communication capability deeply affects (1) the growth capability of an organization and (2) the establishment of a dialog culture as a catalyst for value creation and long-term growth. In fact, innovation communication raises the level of evolutionary fitness.

Communication Capability Blueprint
One important tool for reviewing and planning a communication design for an organization is the Communication Capability Blueprint. It is a visual tool which helps managers to better review and discuss how to design the innovation communication capability from an organizational and management view. It considers the five management areas and values:

Tip! Interested in successful open innovation? Instead of using the Smart Idea Pitch tool
(Fig. 3), learn and apply the Reflective Innovation Dialog tool (Fig. 6) to facilitate strategic, critical thinking and open stakeholder dialogs. Both communication design and relationship management affect the way how to connect and interact with individuals from idea generation all the way to commercialization. In fact, Reflective Innovation Dialog is a supportive technique and (self)training tool for effective stakeholder dialogs in open innovation, for instance, thinking open-mindedly within alternative systems of thought and communicating effectively with involved collaborative partners in figuring out solutions to problems. Rather than pitching an idea it is even more important to appreciate and carry on a good idea dialog! This tool is also of relevance for scientific communication and scientists who want to be successful in disseminating research results, share project deliverables and discuss latest insights.

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Please be aware that a relationship consists of two entities who agree to stay in touch. This disfit-fit thinking approach in networks only exist because all parties allow those types of relationships (No blaming!).

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APPENDIX: Change Communication vs. Innovation Communication

“An anonymous text from the Tradition says that, in life, each person can take one of two attitudes: to build or to plant. The builders might take years over their tasks, but one day, they finish what they’re doing. Then they find they’re hemmed in by their own walls. Life loses its meaning when the building stops. Then they are those who plant. They endure storms and all the many vicissitudes of the seasons, and they rarely rest. But, unlike a building, a garden never stops growing. And while it requires the gardener’s constant attention, it also allows life for a gardener to be a great adventure. Gardeners always recognize each other, because they know that in the history of each plant lies the growth of the whole World.” Paulo Coelho